Mobile Payroll Growth: Reconciling the Global Challenges

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By Dave Foxall

Global Mobile Payroll Deployment: 3 Key Challenges

As the latest Towers Watson HR Service Delivery & Technology Survey cites, technology is the global enabler for transforming the role of HR (including payroll) from “purely administrative to genuinely strategic”. And while an interesting sentiment on its own, buried in the details of this survey were findings that suggested the lever for this transformation is self-service functionality; the biggest driver of which is the ongoing trend for leveraging mobile access. Of course, looking at the current consumer impact of 24/7 anywhere access in our personal lives makes this point readily understandable; but it’s the corresponding workplace demands (particularly as newer generations enter the workforce) that truly put this research in perspective. Further, organizations are keen to reap the productivity benefits of meeting this call to action. Foreseeing this building trend, in 2010 Gary Butler (ADP’s President and CEO) went as far as to say, "Within the next two years, we're going to see businesses spending 35% of their IT budgets on mobile”.

Although the exact adoption percentage may vary from region to region, this investment is a global phenomenon. And while the U.S. might often be touted as leading business innovation, a research report from Bloomberg Businessweek shows that “Europe and Asia Pacific lead the United States in enabling access to mobile HR data”. This movement to global mobile raises a number of questions. Namely, as Kevin Benedict from consulting firm Netcentric Strategies poses, “How do they secure every¬thing? How do they standardize mobile applications on one middleware platform that’s easy to manage? How do they get single sign-on? What kind of governance do they need? Everybody is still trying to figure it out.” The Bloomberg report suggests that such questions can be reframed as three key challenges for an organization looking to implement a global mobile payroll strategy: security, privacy and connectivity.

Global Mobile Payroll Challenge #1: Transaction Security

Mobile payroll security on a global scale must be addressed on two fronts. First there is the ownership of the mobile device itself. Most organizations are happy to make use of the fact that many employees will use their personal smartphones or other handheld computing unit. However, as Ernst & Young pointed out in their information security survey, “With this shift in ownership, organizations relinquish some control around limiting support to single consistent software...[plus] it opens up the possibility of employees knowingly or unknowingly making changes in the mobile device that lessens the security of the device”. For instance, malware downloaded onto an employee’s device that is then used to store or transmit payroll data is a significant security risk. Even more pressing though is understanding and mitigating risk for the impregnability of the device’s software. And the various operating systems available (usually closely brand-linked) offer differing degrees of vulnerability. For instance, Netcentric suggests that iPhones sell well because Apple has provided a methodology for securing them. On the other hand, Google’s Android system for example, is open source and has no current security certification system.

Global Mobile Payroll Challenge #2: Data Privacy

Payroll systems store and use highly personal information; and as such the use of potentially unsecure mobile devices raises the core issue of data privacy. The point of complexity with global payroll is that different countries and regions have different rules and regulation regarding both data privacy and data breach notification. For instance, Bloomberg highlights three examples of local variance; from the The European Union’s Data Protection Directive (which prohibits European firms from transferring personal data overseas to countries with weaker privacy laws, unless the recipients agree to adhere to the DPD’s standards); to Japan’s regulations regarding encryption, and Korea’s rules about solicitation”. Storage and transmission of payroll data in a global or cross-border set up must take into account the rules of all countries involved in the transaction; for both the country of origin and the country of receipt.

Global Mobile Payroll Challenge #3: Network Connectivity

Put simply, regardless of what’s trending in the mobile payroll arena, the world doesn’t have 100% coverage; and in some territories more than others, connection can be a problem. Martin Kuhn of global pharma company Merck, Sharpe & Dohme illustrates this issue by saying, “In the Philippines, once you step outside of Manila, you’re in a no-man’s land in terms of connectivity, so there we have to have offline and online solutions. Em¬ployees sync up data when they get back into range, but we have to have security policies that accommodate that”. Hence, as Kuhn points out, connectivity is not only a practical issue, but that lack of coverage can create issues around data security. For that reason, some companies prefer to keep corporate data off mobile devices from the onset; eschewing the benefits of employee and manager mobile access entirely. While this end-result will undoubtedly vary by company, in essence global organizations deploying mobile payroll functionality need to fully appreciate the patchwork of international networks and take measured decisions about data location and transmission.

Final Thoughts on Global Payroll Challenges

As Towers Watson’s survey observes, “Globalization is driving an increasingly standardized approach for HR across geographies and businesses in a number of countries”. When it comes to the specific issue of global mobile payroll the three challenges above – security, privacy and connectivity – are usually addressed in the balance of provided functionality versus the corporate policy restrictions that organizations put in place. At one end of the spectrum is a blanket policy for all employees regardless of location, at the other is a bespoke approach that tailors a policy to each country’s requirements (although this strategy potentially begins to undermine some of the standardization benefits that come from global payroll). Perhaps the most pragmatic approach is a single consistent policy with a limited scope for local variations where absolutely necessary.